Energy geopolitics and regional dynamics position Greece as stabilising force
Triopetra Beach on the island of Crete. The name derives from the three majestic boulders that divide the bay into two beaches. Copyright by Giannis Giannelos

Geopolitics

  • Geopolitics Stats Icon 1
    NATO, UN, OSCE, OECD & UN

    Major organisations that Greece is a member of

  • Geopolitics Stats Icon 2
    2.39%

    Spending of military as a percentage of GDP

  • Geopolitics Stats Icon 3
    103,500

    Number of refugees and migrants in Greece (UNHCR estimate as of 31 Oct. 2019)

  • Geopolitics Stats Icon 4
    13,676 km

    Length of coastline

The geopolitical chessboard in the Balkans and the eastern Mediterranean is a difficult one to master. With conflict and tensions featuring heavily in the region’s history, Greece has embarked on a major diplomatic drive. The country has tackled the decades-old name dispute with North Macedonia while building on ties with Israel and the United States. Greece’s fast-growing energy sector is playing a key role in its active foreign diplomacy. These ties are helping Greece survive its tough economic times while also boosting its role in the region amid ongoing tensions with Turkey.
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Old Alliances, New Bridges

Changing energy map shapes regional relations as Greece-U.S. ties hit a high point; meanwhile China forges stronger links as Dragon’s Head takes shape.

Spurred on by the country's difficult economic times, Greece has become particularly active on the diplomatic front.

Athens has tackled decades-old thorny issues and extended its reach to the east and west in moves that re-establish the country’s leading position in the region.

It is commonplace to describe Greece as being ‘at the crossroads’ of three continents, a geographical position which brings with it both opportunities and threats. As such, diplomacy has been perhaps the most important component of statecraft for the country’s leaders and governments over the centuries. For a small country with limited natural resources, Greece has punched above its weight at many key points in history.

“Because of its position and size, Greece has historically developed a multi- dimensional, pluralist approach to foreign policy,” says Constantinos Filis, General Director of the Institute of International Relations in Athens.

“The ability to maintain good relations in many directions will serve the country well in a time of shifting global weights and changing alliances. Greece is culturally closer to the west but also knows how to talk to the east, and that is a cultural skill that it can leverage to its advantage.”

Business and Diplomacy of Greece - Infographic

Greece spends 0.04% of its budget on diplomacy. Driven equally by political culture and pragmatism, Greece has an interest in fostering stable, democratic institutions in its immediate neighbourhood and promoting respect for international law. In recent years, this quest has taken on greater urgency due to the country’s sovereign debt crisis. Taking its lead from earlier initiatives, Greece pursued a particularly active, multidimensional foreign policy agenda aimed at re-establishing the country’s role as a leading regional power.

A recent government initiative has brought responsibility for foreign trade and investment under the umbrella of the Ministry of Foreign Affairs. “In order to effectively respond to emerging challenges in this new era that follows Greece’s exit from the crisis, it became evident that the Ministry of Foreign Affairs needed to assume a wider, more modern role,” says Foreign Minister Nikos Dendias. “Overall, this new, comprehensive strategy aims at transforming Greece’s economy, providing potential investors with a safe environment and promoting Greece’s numerous comparative advantages.”

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Israel-Cyprus-Greece

A surprising development of the last decade was the discovery of substantial hydrocarbon reserves in the eastern Mediterranean. As the nearest entry point into mainland Europe, these discoveries put Greece in a pivotal position to act as an energy hub and to assume a key role in diversifying the EU’s energy supplies while improving energy security.

Already in possession of modern facilities for the transportation of natural gas by sea and land, Greece is investing in more capacity domestically and becoming a key partner in major international projects.

In 2020 the Trans Adriatic Pipeline (TAP), an 878 km-long gas pipeline representing a €4.5 billion investment, will start to bring gas from Azerbaijan to Italy, as well as feeding into the southeastern European markets. The project is the result of intergovernmental cooperation between Greece, Italy, and Albania – with EU backing – and private sector involvement from Greece, Italy, Belgium, Spain, Switzerland, and the United Kingdom.

Greece is also partnering with Bulgaria for the Interconnector Greece- Bulgaria (IGB) and building a major liquefied natural gas (LNG) termial in Alexandroupoli to complement the existing facility in Revithoussa.

Perhaps the most ambitious energy project proposed is the EastMed, a record-breaking 2,000 km undersea pipeline to connect the gas fields of Israel and Cyprus to the Greek network, and ultimately to the rest of Europe. The Greek government has signed several high-level agreements with Israel and Cyprus backing the project, culminating in the inking of a final agreement on the pipeline in early January 2020 by energy ministers of Greece, Israel, and Cyprus. While Italy still needs to sign off on the agreement, targets have been set for a final investment decision to be made by 2022, and for the pipeline to be completed by 2025.

The new opportunities offered by joint energy projects have helped to foster an unprecedented degree of cooperation between Greece and Israel in a number of areas, including defence, tourism, and shipping, as well as leveraging the two countries’ substantial diasporas – with the potential to pay dividends in both the economic and the diplomatic sphere for years to come.

The initiatives have also underlined Greece’s important role in the eastern Mediterranean and enhanced ties with partners such as Israel, Egypt, and Jordan.

Copyright: TAP - Pipeline. COpyright by ververidis vassilis / shutterstock.com

Turkey

Tensions with neighbouring Turkey have been a mainstay of regional geopolitics for the last two centuries, ever since the two countries came into existence as modern states. Turkey’s increasing isolation from the West and its neighbours following the 2016 failed coup attempt and the country’s involvement in the Syrian civil war alongside Russia has been seen by many as a tipping point in its relationship with the West.

With EU accession talks stalled, and the United States threatening economic war and the suspension of arms sales, some see a greater opportunity for Greece to build its position as a stabilising force in the region.

Athens has worked hard to maintain stable diplomatic relations with Ankara, notwithstanding belligerent rhetoric and aggressive manoeuvres by its neighbour under President Erdogan. And while hydrocarbon discoveries in the eastern Mediterranean are a boon for the region, Turkey’s stated intent to continue internationally condemned exploratory drilling activities off the coast of the divided island of Cyprus, including within its Exclusive Economic Zone (EEZ), have sparked renewed tensions between Athens and Ankara. A series of sanctions were prepared by the European Union against Turkey in response.

Escalating matters further, in November 2019 a bilateral accord was signed between Turkey and Libya’s UN-backed government on maritime boundaries in the Mediterranean Sea in a bid to create an exclusive economic zone spanning from Turkey’s southern Mediterranean shore to Libya’s northeast coast. And while the agreement has been opposed by the European Union, and lacks legal bearing on third countries, the move is seen as an attempt by Ankara to clear the way for oil and gas exploration in the area, and thwart the progression of the EastMed pipeline project.

Turkey’s drillship YAVUZ. Copyright by muratart / shutterstock.com

These so-called memorandums of understanding (MoUs), says Minister Dendias, “violate international law and the Law of the Sea, and, as such, are null and void and serve close to nothing to bring peace and stability in Libya and in the wider region.”

Greece has threatened to block an EU-backed political solution in Libya unless the agreement is scrapped.

Yet despite a build-up of friction, Turkish incursions in the Aegean, Greece’s sheltering of accused coup plotters, and the management of the refugee crisis, high-level diplomatic relations continue unabated despite the often-strident public rhetoric.

Prime Minister Mitsotakis and President Ergodan met on the sidelines of the NATO gathering in London in December 2019. They agreed to continue discussions on the Confidence-Building Measures of the Ministry of Defense – a list of actions ranging from cultural exchanges to military rules of engagement – first initiated between the two countries as far back as 1988.

Greece also continues to support Turkey’s EU accession bid, arguing that bringing Turkey within the western fold will ultimately lead to a more stable long-term relationship governed by European laws and values. Accordingly, Athens prefers to direct any retaliatory actions against Turkey through EU channels.

The United States

Deteriorating U.S.-Turkish relations and shared economic interests, particularly in the energy sector, have brought Athens and Washington closer together during the Trump presidency.

At the diplomatic level, Greece and the U.S. inaugurated Strategic Dialogue in 2018, which aims to deepen the relationship in a number of dimensions, including defence and investment. In 2019, the two countries signed a new military defence cooperation agreement, upgrading their strategic ties.

Ties were further cemented in January 2020 after U.S. President Donald Trump welcomed Greek Prime Minister Kyriakos Mitsotakis to the White House. Besides being an opportunity to present Greece’s political views, the visit was an opportunity to boost cooperation in areas of defense, economy and energy, while seeking U.S. backing in response to Turkish provocations.

The U.S. has, at times, expressed concern about Russian political influence in Greece, however Athens has managed to maintain good relations with both countries, building on religious and cultural ties with Russia as well as more recent links in trade and tourism. Greece is demonstrating that good relations with these traditional rivals are not mutually exclusive.

In 2018, the U.S. was the honoured guest at the Thessaloniki International Fair, which was attended by senior Washington officials and more than 50 U.S. companies. This was a formal expression of U.S. interest in participating in Greece’s economic recovery, and an acknowledgement of Greece’s role as the leading regional power in southeast Europe.

Meanwhile, there has been strong engagement at lower-level events relating to high-tech knowledge sharing across a variety of sectors, high-level meetings with major U.S. businesses, and a strategic investment pipeline with a particular focus on energy projects.

Copyright: Bestravelvideo / shutterstock.com
EU Parliament. Copyright by artjazz / shutterstock.com

SOUTHEAST EUROPE

To Greece’s north, Cold War-era divisions and their subsequent ethnic conflicts have left a heterogeneous patchwork of countries in the Balkan peninsula, with major structural differences in the neighbouring national economies.

Recent history has also left enduring physical barriers, including segmented road and highway networks. Recent developments, however, have highlighted the enormous benefits that could accrue to the region by overcoming these barriers through closer cooperation and the creation of integrated energy and logistics networks.

Greece gave new impetus to its role in Southeast Europe by championing the quadrilateral summit of Balkan states – an informal initiative bringing its government together with the governments of Bulgaria, Romania, and Serbia – to promote their shared priorities of enhanced connectivity and European integration in the region. As the quartet’s oldest EU and NATO member, Greece has brought to the table know-how and vision, as well as influence within international organisations, that benefit the region as a whole.

Having pioneered the creation of the European perspective on Balkan countries since 2003, when it pushed forward the Thessaloniki Agenda, Greece has also helped, through its alliances, to keep EU enlargement in the Balkans on the EU agenda despite the recent setbacks in accession talks.

Meanwhile it has benefitted from greater coordination in representing shared regional interests in major transnational projects, such as China’s Belt and Road Initiative and the EastMed Pipeline.

The quartet has also played a key role in pushing ahead the China and Central and Eastern European Countries summits (China-CEEC summits), seeking to forge closer ties between China and 17 central and eastern European countries. The 2018 summit in Varna, Bulgaria hosted Israeli Prime Minister Benjamin Netanyahu.

Commercial interests aside, there is a widely shared awareness that only strong institutions can guarantee sustainable growth in the region.

The ratification of the Prespa Agreement serves as a bright though exceptional example of peace-making in a region marred by resurgent nationalism and ethnic tensions. Greece has increased its diplomatic weight, as a result of this achievement, which some see as a template for solving other disputes in the region through multilateral negotiations. In this respect, Greece must now support the implementation of the agreement against continuing challenges, all the while nudging North Macedonia towards shared values and respect for international law.

China

The commercial benefits of closer relations with China are already very evident. Over the last decade, investment by Chinese state-owned COSCO in the Port of Piraeus, designated the Dragon’s Head of China’s New Silk Road into Europe, has turned Piraeus into the second-largest container port in the Mediterranean. And it has ambitious long-term expansion plans. China’s State Grid owns a minority stake in the national power transmission network, while there is growing interest from Chinese corporations in investing in major infrastructure projects and renewable energy, as well as establishing research and development partnerships.

In November 2019, on the back of bilateral visits by Greek Prime Minister Mitsotakis to Shanghai, and by China’s President Xi Jinping to Athens, government officials signed 16 bilateral deals. In doing so, besides expanding the presence of logistics giant COSCO at Greece’s Port of Piraeus, a roadmap was forged to deepen bilateral business ties in areas including energy, agriculture, tourism, and logistics. A 17-point joint statement on “Strengthening the Comprehensive Strategic Partnership” was also signed, underlying “Greece’s important role in promoting the EU-China partnership.”

On the back of growing diplomatic and commercial relations, increasing numbers of Chinese citizens are visiting Greece for tourism. 200,000 Chinese visitors were recorded in 2018, out of a total of 33.1 million visitors to Greece that year. According to Bank of Greece data, the number of visitors from China is projected to carry on growing at an annual rate of over 20%.

Some are forming more lasting ties. Between 2014 and October 2019, close to 3,500 Chinese citizens gained residence in Greece through the government’s Golden Visa Greece programme for property investors. By far, they are the largest group out of a total of 5,300 according to official figures from the Ministry of Citizen Protection. At the same time, cultural and educational links are being strengthened through university programmes and cultural exchanges, creating deeper links between the two countries. An official visit by President Xi Jinping in November 2019 was the occasion for the signing of 16 further agreements on trade and economic cooperation.

COSCO - Port of Piraeus. Copyright by Aerial-motion / shutterstock.com
One Belt One Road. Copyright by My portfolio / shutterstock.com

Greece has a fine balancing act to maintain between its strong institutional ties with the West, cemented through its membership in the EU and NATO, and the relationships it is cultivating with rival powers such as China and Russia.

Concerns about alleged growing political and commercial influence, and potential security threats through control of major infrastructure, have Greece’s western partners keeping a close eye on developments and seeking to limit the reach of Chinese investments in particular. However, the more alarmist warnings should be tempered by the knowledge that Greece’s membership of the EU in particular places safeguards around key issues like trade rules and labour rights.

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